Law Question and Answers Solved

Law Question

ABSTRACT
Banking regulations are referred to directives which are enforced by the government
subjecting banks to certain requirements, guidelines and restrictions, designed for creating
transparency in market among banking institution, individual and corporations. The present
report is about financial crisis with context to a banking institution in UK as Royal bank of
Scotland. Report states that ideal regulation of banking institution will be able to prevent crisis in
UK. Further it also includes the preventive nature of some aspects of bank regulation and its
limitation addressing to banks. The UK had responded to financial crisis with formation of
Financial Policy Committee as its initial responsibility. This committee is responsible to
determine, mitigate and monitor risks to financial stability with objective to ensure that
regulators undertake holistic approach for safeguarding the financial stability. Moreover, it has
shown about UK responses for 2007-2008 financial crisis with context to Basel III, banking
resolution, stress testing which was performed by bank of England and capital requirements of
European union and these turn to be very effective till date.
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Table of Contents
ABSTRACT.....................................................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Can banking regulation prevent crisis:........................................................................................3
Bank failed globally in particular UK.........................................................................................4
Causes of financial crisis.............................................................................................................4
UK responses to crisis.................................................................................................................6
Risk and the development of the modern banking:.....................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Banking is the financial institution which deals with various business, investors and
public to invest their money into this sector. They provide security for the investment made by
the society at financial level. Banks' duty is to provide loans to the public, provide security to
their monetary deposits and also provide access to locker facility to safely handle the public
security boxes. They also deal in currency exchange and helps small bank to expand their
services through guidance and relaxations. Reputed banks also occurs with financial crisis with
this note present report is based on banking crisis and also the case of Royal bank of Scotland.
Report will include the interpretation of banking regulation and manner in which it can
prevent crisis in UK. Further it also includes the preventive nature of some aspects of bank
regulation and its limitation addressing to banks. It also includes the examining of risk and
development of modern banking. It includes the cases of Royal bank of Scotland which failed
globally in UK. Lastly it includes various norms which causes financial crisis.
MAIN BODY
Can banking regulation prevent crisis:
Banking regulation can prevent the issue arises in form of crisis as they ensure that major
areas of concerns relating to financial stability are addressed. The banking regulations is also
responsible to look after financial institution and holistic financial sector (Banking Regulation,
2019). Mainly banking regulation majorly involves three institution i.e. the Financial service
authority (FSA), Bank of England and the Treasury. These three institutions helps the banks to
regulate their various sectors and help the public feel safe when they deal with banks. The role of
regulator arises in form of government regulation.
Bank regulator acts as the primary governing body i.e. The financial Service
Authority(FSA) has two main objective to prevent the banks from financial crisis. Firstly It helps
the customers to deal with fair and accrual basis. It offers services in favour of the customers and
no results of fraud committed in the services (New Regulation to prevent financial crisis and
improve financial stability, 2019). Secondly it's the duty of the banks to promote fair and eligible
services which helps the banks to grow more in comparison to other banks. Customers are
usually attracted from the services, trust and security which banking institutions built with the
customers. With these aspects, FSA set the standards and norms for every banks to limit their
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